05/09/2008

The owners of stv have today formally set in motion plans to give £30 million to its shareholders and, at the same time, reduce the number of shares in circulation.

In an announcement to the City this morning, SMG says the cash will be given by way of a tender offer, and has become available via a recent sale of its radio division, Virgin Radio.

Shareholders are being invited to state at what price they’d be willing to cash in their shares at, in a range between nine pence and 15p. Yesterday, SMG shares closed at 9.95p.

Once all tenders have been received on the 25th of this month, a so-called 'Strike Price' will be set and each SMG share will be purchased at that price. The 'strike price' will be the lowest price that repurchases the largest number of SMG shares at a total not exceeding £30 million.
 

Selling via a tender offer is tax free (while on the market is not) and also one new share in SMG - which is about to change its name to stv group plc - will be given in return for every 20 handed over.

The move is expected to result  in the return of between 200 and 333 million ‘old’ shares.

The announcement also says that directors David Shearer, Richard Findlay, Jamie Matheson, Rob Woodward and George Watt do not intend to participate and therefore benefit from the £30 million return.

For more, read here.

* Send your Scottish media news and gossip, in the strictest confidence, to  info@allmediascotland.com